Hanwell aims to double top line with expanded offerings
It is looking to offer canned food and frozen food as well as ready-to-eat meals, adds executive chairman Sam Goi
Singapore
HANWELL Holdings is looking at doubling its top line in three to five years' time by increasing its consumer product offerings by about 30 per cent, said executive chairman and largest shareholder Sam Goi.
Hanwell posted S$257.8 million in top line for the first half of FY2021, up about 20 per cent year on year. Its consumer business, however, reported a drop of 5.6 per cent in revenue, mainly due to a high base last year as a result of a demand surge for rice and paper products during the "circuit breaker".
Formerly known as Provisions Suppliers Corporation, the mainboard-listed company is a manufacturer and distributor of a variety of well-known brands of consumer essentials. Among them are Royal Umbrella rice, Beautex tissue paper and Fortune tofu.
Mr Goi, dubbed the "Popiah King" because he owns one of the world's largest popiah (spring roll) wrap producers, shared with The Business Timeshis plans for Hanwell, in which he has been building a sizeable stake. He now owns 29.8 per cent of the company.
According to Mr Goi, Hanwell is casting its sourcing net wider to the global market and looking to offer canned food and frozen food - including poultry and seafood - as well as ready-to-eat meals.
Hanwell's chief executive Henry Chu added that the pandemic has not disabled sourcing efforts as meetings with prospective suppliers have turned virtual. But the process has been slower than it would have been if travel was possible.
Hanwell will also sell beyond its key markets of Singapore and Malaysia to reach out to the whole of Asia. For a start, it will pick the low-hanging fruits: nearby countries and products such as frozen food that have proven to be popular with local palates.
Meanwhile, Hanwell is building its e-commerce platform to ride the online shopping wave unleashed by the pandemic.
It is also contemplating reconfiguring the layout of the premises it owns in Jalan Boon Lay to optimise usage and make room for storing more goods as it expands its offerings.
Although he was specific about the top-line goal, Mr Goi did not give a target for earnings as he said some costs are beyond the company's control. Hanwell's bottom line dropped by 10 per cent year on year to S$8.9 million for H1 FY2021, from S$9.9 million.
Mr Goi said his preference for dividend payout ratio is 30 per cent to 40 per cent, but this would have to take into consideration Hanwell's liquidity needs and also require approval from the board. Hanwell declared an interim dividend of 0.25 Singapore cent for the half year, compared to no payout for the corresponding period a year ago.
It is still early to say if there will be a special dividend to celebrate Hanwell's 50th anniversary in 2024, said Mr Goi when asked by BT.
Mr Goi had promised following his re-election as non-executive chairman in April to leverage his knowledge, experience and network to help strengthen leadership and corporate governance in the company.
Shortly after the annual general meeting, where he prevailed in a board tussle, he nominated two ex-NTUC FairPrice Co-operative veterans - S Chandra Das and Tan Kian Chew - as independent directors.
Mr Chandra Das was former chairman of FairPrice and currently is deputy chairman at mainboard-listed food and beverage manufacturer Yeo Hiap Seng.
Mr Tan retired as the chief executive of FairPrice in 2015 after helming the supermarket chain for 18 years. During his time there he lifted its annual sales from S$752 million in 1997 to S$3.2 billion in 2014. He is now a member of the board of industrial agri-food Japfa.
Mr Chu, who was last CEO of food and beverage player BreadTalk, was hired in May to helm Hanwell. He is Hanwell's first CEO in a decade. His appointment came hot on the heels of the two new directors' appointments.
Hanwell had since 2012 been managed by then-shareholder and executive director Tang Cheuk Chee, until she was turfed out at the April AGM.
Hanwell has added a brand strategy and communications position and a business development role to beef up the team at the group level.
"Without talents, it's hard to grow the business big and strong," commented Mr Goi, who also has stakes in half a dozen listed companies.
He is also the controlling shareholder of mainboard-listed property developer GSH Holdings with a nearly 63.6 per cent stake. He also owns Tee Yih Jia Food Manufacturing, known for its popiah wrap.
The self-made billionaire has also become an executive in Hanwell in early September, but still draws a remuneration of S$1. He had earlier offered his services as executive chairman at the nominal rate before the April AGM, but the former board declined to accede to the 73-year-old's request.
"I'm not young anymore, I hope that there is a replacement who will come along in the renewal process and do a better job than me," Mr Goi replied, when queried if he would ask for a higher remuneration in future.
